Ethena Labs founder Guy Young said that stablecoins need to focus on liquidity, not decentralization.
The main question about the risk of stablecoins is related to solvency. One way to reduce the risk of solvency is to set up an insurance fund. There will be more than one effective collateral in the system, because basically there is a pool of US dollars behind the stablecoin.
He said the insurance fund could act as a bidder of last resort to ensure stability if prices were misaligned.
Young also believes that the fact that Lido and its liquid staking currency stETH dominates the market for ethereumstaking services is not necessarily a bad thing.
If you want to ask which is more important, liquidity or decentralization in times of market volatility, then exchanges care more about liquidity.
Lido’s staking platform and liquid staking token, Lido Staked Ether ( stETH ), has the best validator set and is battle-tested and has very good market traction.